Outgoing Iran President Mahmoud Ahmadinejad
Iran has increased its capacity to refine uranium by installing hundreds more centrifuges, a UN nuclear agency report said on Wednesday, underlining Tehran's defiance of Western demands to curb the activity.
But, in a development that could help buy time for diplomacy between Iran and world powers, the report showed limited growth of Iran's most sensitive nuclear stockpile and it remained below an Israeli "red line" for possible action.
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Tehran's holding of medium-enriched uranium gas is closely watched as Israel says it must not amass enough for one bomb if further processed and has threatened air strikes if diplomacy and sanctions do not stop Iran's atomic drive.
The report by the International Atomic Energy Agency (IAEA) indicated that Iran was pressing ahead with the construction of a research reactor that Western experts say could offer it a second way of producing material for a nuclear bomb, if it decided to embark on such a course.
Critics say Iran is trying to achieve the capability to make atomic arms. Iran denies this, saying it needs nuclear technology for energy generation and medical purposes and that it is Israel's reputed nuclear arsenal that threatens regional peace.
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